Ohio’s Sixth District Reverses Order Granting Class Certification

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In Gordon v. Erie Islands Resort & Marina, 6th Dist. No. OT-13-040, 2014-Ohio-4970, the Court of Appeals for the Sixth District of Ohio reversed an order granting class certification on the grounds that the trial court failed to provide any rationale for its decision.  The defendant, Erie Islands, owned a collection of cottages and recreational facilities in Port Clinton, Ohio.  The named plaintiffs were individuals who purchased undivided ownership interests as tenants-in-common to Erie Islands, at varying membership levels, beginning in 1989. 

In 2010, the appellees filed a 19-count complaint against Erie Islands alleging, amongst other causes of action, fraud, breach of contract, breach of fiduciary duty, and violations of the Ohio Consumer Sales Protection Act.  In short, the plaintiffs alleged that Erie Islands had, amongst other things, failed to provide the amenities that it represented would be available, charged improper services fees, and sold more memberships to its facilities than it could reasonably accommodate.  The named plaintiffs moved for class certification, and requested the trial court to certify up to six distinct subclasses.

In opposing class certification, Erie Islands argued that individualized issues would overwhelm the class, particularly with respect to analyzing the various fraud claims alleged (including whether what was in-fact represented to each class member, whether the class members relied on said representations, and whether a particular class member suffered any damage).  Further, Erie Islands argued that the claims of the named plaintiffs, who had purchased their interests in 1989, were time barred for nearly all causes of action, creating a conflict between the named plaintiffs and putative class members. 

The trial court granted the plaintiffs’ request for class certification by way of a two-paragraph opinion, merely reciting the stock language of Ohio Civ. R. 23 and finding that the required factors were satisfied.  Erie Islands appealed, and the Sixth District unanimously reversed the trial court’s decision. 

Relying on the Ohio Supreme Court’s decision in Hamilton v. Ohio Sav. Bank, 82 Ohio St.3d 67 (1998), the Sixth District held that the trial court’s perfunctory order granting class certification constituted an abuse of discretion as it failed to articulate the rationale for its decision.  By failing to provide any explanation for why it found the elements of class certification had been satisfied, there were no grounds upon which the Sixth District could find that the trial court conducted a careful analysis of the elements of Rule 23 or examine whether the trial court’s decision was within the sound exercise of discretion. 

Accordingly, the Sixth District reversed the order granting class certification, and remanded with instructions that the trial court provide an opinion explaining the basis for its decision, including addressing the elements of Rule 23 and Erie Island’s grounds opposing class certification. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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